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HomeMy WebLinkAboutBy-law No. 2016-032 THE CORPORATION OF THE MUNICIPALITY OF BAYHAM BY-LAW NO. 2016-032 A BY-LAW TO ADOPT A MUNICIPAL CHARITABLE DONATION RECEIPT POLICY WHEREAS the Council of The Corporation of the Municipality of Bayham recognizes the need for a clear and concise policy concerning Municipal Charitable Donation Receipts; AND WHEREAS the Council of The Corporation of the Municipality of Bayham deems it advisable that the Policy on Municipal Charitable Donation Receipts be confirmed and adopted by By-law; THEREFORE THE COUNCIL OF THE CORPORATION OF THE MUNICIPALITY OF BAYHAM ENACTS AS FOLLOWS: 1. THAT effective upon passage the Policy on Municipal Charitable Donation Receipts attached hereto as Schedule "A" and forming part of this by-law is hereby adopted as the policies and procedures for the management of Municipal Charitable Donation Receipts for the Municipality of Bayham. 2. THAT this Municipal Charitable Donation Receipt Policy By-law may be amended from time as directed and deemed necessary by The Council of the Corporation of the Municipality of Bayham 3. THAT any Municipal Charitable Donation Receipt policies previously adopted are hereby repealed; 4. AND THAT this by-law shall come into full force and effect upon final passing. READ A FIRST, SECOND AND THIRD TIME and finally passed this 21st day of April 2016. M°YOR LE-K ,- PROCEDURE MUNICIPALITY OF BAYHAM ., "Oy �� oortunity Is� SUBJECT: Charitable Donations Receipt Policy DEPARTMENT: Treasury DATE ORIGINATED: April 7, 2016 REFERENCE : Procedures-Treasury-TR-14-2016-charitable donations PURPOSE This policy formalizes the charitable donations receipt program, including accounting for donations of cash or in-kind made to the Municipality. This policy also outlines the standard for evaluating donations in accordance with Canada Revenue Agency (CRA) guidelines. This policy will serve as the foundation for standard operating procedures for issuing official charitable donation receipts (official receipts) to donors for income tax purposes. POLICY STATEMENT The Municipality of Bayham will issue official receipts for donations that qualify as charitable donations. If requested, the Municipality will issue official receipts to donors for eligible donations with a net cash value of or net fair market value of $20 or more. SCOPE This policy applies to all departments within the Municipality of Bayham; to all agreements between the Municipality and organizations and individuals that contribute either financially or in-kind to the Municipalities operations, programs, services or facilities. OBJECTIVES This policy formalizes the charitable donations receipt program within the Municipality to ensure that official receipts are issued in an appropriate and consistent standard across the organization and in accordance with CRA guidelines. DEFINITIONS For the purpose of this policy, unless otherwise stated, the following definitions shall apply: Term Definition Charitable Donations Voluntary transfers of tangible property, including cash. Donations in-kind Tangible property, other than cash, that are eligible donations Eligible Donations Donations that can be acknowledged with official donation receipts for income tax purposes, in accordance with CRA guidelines. Fair Market Value (or Valuation) The highest dollar value that a property would bring in an open and unrestricted market, between the willing buyer and the willing seller who are acting independently of each other. The fair market value of a property does not include taxes paid; taxes are costs incurred by the purchaser. Net Amount of Donation The fair market value of the donation less any advantage/benefit received or to be received as a result of the donation. Non-Qualifying Donations Donations that cannot be acknowledged with official donation receipts for income tax purposes, in accordance with CRA guidelines. POLICY GUIDELINES To be eligible for an official donation receipt, the donation has to: • Be made payable to the Municipality, and • Be made in cash or in-kind, and • Be voluntary, and • Be supportive of the Municipality's mandate or beneficial to the community of the Municipality of Bayham. Donations in-kind may be accepted only after the following has been assessed: • Compliance with Municipal by-laws and/or policies • Compliance with the laws, conventions and treaties of the other levels of government • Consistency with the Municipality's priorities, mandates, strategic and business plans. • Associated risks (e.g. Financial risks; political risk; health and safety issues) • Condition of the donation • Value of the donation • Usefulness of the donation to the Municipality • Cost/benefit analysis, considering installation, storage, maintenance, renewal, decommissioning, replacement and related costs; Written valuation of donations in-kind, done within the last 6 months, shall be submitted with the requests for official receipt and is to meet the following requirements: 1 $1,000 or less; o Appraisal by knowledgeable internal staff; plus o Valuation from online auction and shopping website 1 Over$1,000: o External appraisal of property by an independent and arm's length competent individual is required; o The costs associated with obtaining a qualified appraisal shall be the responsibility of the donor. Authority for acceptance or denial of donations in-kind with appraised value of: • Under $20,000 - Treasurer or Chief Administrative Officer • $20,000 and more - Council approval Non-Qualifying Donations that cannot be acknowledged with official donation receipts for income tax purposes, in accordance with CRA guidelines: • Intangibles such as services, time, skills, effort • Donations that are given to the Municipality intended as a flow through to a specified recipient who does not have charitable organization status. • Donations of a business marketing products such as supplies and merchandise • Sponsorship in the form of cash, goods or services toward an event, project, program or corporate asset, in return for commercial benefit (i.e. logo placement or presenting sponsorship). The intent of a sponsorship is to enhance the image and marketing opportunities of the sponsor in its target market and/or the community. Sponsorships are a reciprocal arrangement benefiting both parties. Usually the cost to the sponsor is categorized as a business expense. ROLES Accountability Treasurer Signing Authority Treasurer or CAO to sign official donation receipts on behalf of the Municipality of Bayham Responsibilities • Treasurer-for maintaining the Charitable Donations Receipt Policy and related standard operating procedures, communication of policy and procedures to departmental staff, advising staff on eligibility of charitable donations and review donation accounts analysis prepared by staff. • Accounts Receivable/Payroll Clerk- responsible for issuing official donation receipts in compliance with the CRA guidelines and maintain record according to the CRA requirements; in-kind donations are properly assessed, donation accounts are reconciled • Departmental staff accepting donations- responsible for compliance with the Charitable Donations Receipt Policy and any related standard operating procedures; ensuring Official Donation Receipt Request Form (Appendix A) is completed and submitted to the Treasury Department with the donated item and any supporting documentation Appendix A -10-Y1144.4 9344 Plank Road •M.�. , P.O.Box 160 Straffordville,ON NOJ 1Y0 519-866-5521 OAPui'tunity jslt°45 Donor Information Donor Name(including middle name): Or Charity/Organization:_ Business Reg.#:_ Donor Address(including fire#): Telephone Number: Donated Item Cash Donation: Amount:$ Date Donation Received: In-Kind Donation: Description of Donation: Date Donation Received: Date of Appraisal: Name of Appraiser: Address of Appraiser: Please attach the Appraisers letter acknowledging the fair market value Municipal Use Department Name of Municipal Employee Accepting Donation: Signature: Date: Treasury: Date Receipt Issued: Receipt#: Treasury